This (the law, not the video segment) isn't about disconnecting you from the Internet - it's about the government giving the President authority to disconnect certainly government systems FROM the internet in the event of an online attack.
Given that the President (the office) is already regarded as the supreme military commander, this seems pretty common sense to me.
Computers are used more and more in government and military, and as has already been evidenced by the Chinese government hacking into some of our systems, computer based warfare is shaping up to be one of the main battlefields of the future. Personally I think we'd be flat out daft NOT to have some plan in effect to segregate government and military systems from the main Internet in such an event.
If you're really that worried about it, there are tools to get around most privacy violations that you might be worried about.
Just a few tips if you're worried:
1. Use Linux. Unlike most other computer operating systems, the source code for Linux is publically avaialble and auditable. As an overall project done by volunteers it's also not based in any one particular country that can have much influence on it.
2. Use TOR - The Onion Router. This is an obfuscation technique that works by encrypting your packets under multiple layers of encryption. The end result is that the computer that ends up receiving the data doesn't know where the original sender was on the internet - data outputs from the TOR network at a random exit gateway.
3. For even heavier security, use FreeNet. This is almost like a second world wide web - it's not used to access the normal web. Here, even the content you're accessing is floating somewhere out in the encrypted nether. It's virtually impossible to trace down the sender or receiver of anything here. Just know before you start using this though that FreeNet's encryption and obfuscation is used by all sorts of shady characters. It's really a red light district where you have to accept that the anonymity that it offers you it offers all sorts of other people with agendas and tastes you might not like.
4. Always run a firewall. This is common sense even from a standard viewpoint, but I can't stress enough that unless you have a good reason to, your computer should never accept incoming connection requests on any port.
5. Anything you don't want found, use TrueCrypt. TrueCrypt is a virtual container encryption program much like the old PGP disk program, or BestCrypt, but TrueCrypt is free and open source (I can't stress enough that if you're concerned about what programs are doing on your system, open source is the way to go). I work in government and we use this ourselves when sending data from us to software companies to make sure if the disk is lost in transit no one can access it's contents. Essentially it creates a big file on your disk with military grade encryption applied. You can then attach that file to a drive letter (say, H: if that's open) and use it like a big disk drive. When you're done you disconnect the file from the drive letter. None of the information you have within the file is then viewable without the password. With the grade of encryption used here you're looking at the most powerful supercomputers on Earth taking millions of years to brute force crack it. You keep your password safe and your data is safe.
Truthfully I'd be FAR more worried about what the copyright lobbyists will get the government to do rather than what the government itself is spying on just for the sake of spying.
